THE INDONESIAN AUTOMOTIVE MARKET AT A GLANCE
The automotive sector plays a crucial role in Indonesia’s national economy, serving as a key driver for a wide range of related industries. It is closely connected to other sectors like steel, chemicals, and services, forming an extensive network of suppliers and supporting businesses.
Indonesia’s passenger car market was valued at $15.62 billion and is expected to grow to $23.33 billion by 2030, reflecting a compound annual growth rate (CAGR) of 4.2% from 2021 to 2030. The government has set an ambitious target of 3 million units in annual production by 2030, with projected passenger car unit sales reaching 657,800 vehicles in 2028.
As part of its global commitment to achieve Net Zero Emissions (NZE), Indonesia is working toward a 43.2% reduction in emissions in alignment with international commitments. To help reach this goal, the government has implemented several incentives, such as:
- Removal of the Luxury Goods Sales Tax (PPnBM)
- Zero import duties
- Government-covered Value Added Tax (VAT) for electric vehicles (PPN DTP)